Artificial Intelligence

We sometimes feel that technology is accelerating faster than we can
keep up. As it happens, Ray Kurzweil’s ‘Law
of Accelerating Returns’ theory describes that phenomena rather nicely.

It’s sobering, then, to realise that artificial intelligence has
been around for 60+ years. For it was in 1956 that the first official
AI conference took place, in Dartmouth College, New England.

There have been many lofty predictions involving AI over the years,
and many, many false dawns:

“Duplicating the problem-solving and information-handling
capabilities of the [human] brain is not far off; it would be
surprising if it were not accomplished within the next decade.”
Herbert Simon, AI Pioneer, New York World Fair, 1964.

Why, then, does it feel like AI is all the rage today? Why is AI
presenting as the bogeyman about to take our jobs away?

In short, AI is in vogue again. And unlike the false dawns and
subsequent AI
Winters of the mid-70s and late 80s, it seems that artificial
intelligence now works as per the instructions on the label.

Instead of trumpeting the virtues of AI from the rooftops as
previous pioneers have been inclined to do (from pride, excitement,
and a need to source funding), technology companies have simply got on
with embedding the technology into their products and systems.

Witness, for example, the AI inherent in our email systems –
silently sorting the spam from the required reading. Or at the other
extreme, the intelligence that allows vehicles to drive themselves.

Before we dive into artificial intelligence and its effect on the
accounting and bookkeeping industry, let’s first understand exactly
what we mean by the term ‘artificial intelligence’.

What is AI?

“Artificial Intelligence (AI) is usually defined as the science of
making computers do things that require intelligence when done by
humans.” Jack
Copeland, 2000.

We bunch artificial intelligence into three types:

Narrow AI – Whereby a computer does one thing really, really
well. A chess-playing
computer, for example. Much of the AI in place today falls under
the narrow AI banner: the afore-mentioned spam sorter in your email,
your phone’s map and music apps (among loads of other phone examples),
self-driving cars … they’re all narrow AI.

General AI – General AI describes the arbitrary achievement of
a computer to reach the approximate intelligence level of a human.
It’s perhaps inspired in part by one of the founders of modern AI –
Alan Turing and his Turing test. A computer ‘passes’ the Turning test
when its intelligence is indistinguishable from a human’s. Microsoft’s
XiaoIce chatbot is a sort of example of general AI. It is
however missing the ability to reason and think abstractedly like a
human can, among things.

Super AI – When we think of AI in popular culture such as
movies and books, we tend to think of super AI; HAL 9000 from 2001: A
Space Odyssey, for instance. Super AI occurs when computers accelerate
past the intelligence of humans. We’re not there yet. Nor are we
across what it will mean for humanity. What problems will a computer
with an IQ a trillion times more powerful than ours be able to solve?
All of Earth’s problems, perhaps?

An AI future

For the accounting and bookkeeping industry, it’s advancements in
narrow AI that most concern us for the next five to ten years.
Continued automation breakthroughs in transaction processing, for
example, will create opportunities for smart operators, and dangers
for laggards.

The small business owner of the future may not know whether they
have accounting software. They may go about the business of doing
their business without entering a transaction or recording an invoice
or approving a pay run. Frictionless transactions might enable that
future, where the business advisor sets their client up with the
accounting solution, while sensors in-store record data that feeds
into the accounting solution managed by the business owner’s advisor.

Sound far-fetched? Amazon Go will
allow customers to shop without scanning their goods. No cashier, no
self-scanning – simply walk in, select what you want, and walk out.

The Committee for Economic Development of Australia (CEDA)
identified the probability that 40% of Australia’s workforce (more
than five million people) could
be replaced by automation within the next 10 to 20 years. This
is a common prediction but in the past new technology has not
necessarily destroyed jobs but created new ones. We can’t know what
new jobs might emerge in the future but there will be more roles in
the artificial intelligence industry as that technology becomes more
mainstream. AI will disrupt industries though, some jobs will be lost,
and people will need to learn new skills.

It’s interesting to note that there have been around 1,500 new jobs
created since 1990 – positions such as SEO specialist, web analyst,
social media manager, vlogger (or blogger, for that matter). In most
major cities, approximately 10% of workers are in one of those 1,500 roles.

There are always signals that a job is losing relevance, and a
recent MYOB stakeholder survey showed clearly that bookkeepers are
aware that their roles are changing right now. This doesn’t mean that
their future is one where they become obsolete though. It does mean
that bookkeepers and their stakeholders need to rethink how their
service can be redefined and offered in different ways to maintain relevance.

Opportunities through AI

“I didn’t go to university to learn numbers – I went there to learn
how to help businesses.” Amanda Gascoigne, Gascoigne Consulting.

Improvements in artificial intelligence in accounting and
bookkeeping will create new service opportunities for both
professions. Perhaps the most profound change won’t be technical,
though. Rather it’s the change in engagement model – from reactive to proactive.

The AI-augmented future will see accountants and bookkeepers
actively and constantly engaging with clients. The machines will do
the laborious work, while the humans will provide the emotional,
social, and contextual intelligence that an AI cannot hope to
replicate anytime soon.

It’s worth repeating that the machines will augment our work, not
replace it. No computer will adequately ask questions of a client
unassisted – certainly not in the foreseeable future. The key is to
embrace technology, to put it to work, and to turn any time savings
into new service opportunities.

Accounting and bookkeeping forecasts

Accounting may be the next on-demand community, similar to
Airbnb and Uber. People may use an app to identify what companies
specialise in services they require and connect the client with that
company directly from the app.